State could demolish Detroit's Joe Louis Arena if new Red Wings complex built

DETROIT, MI -- It's a long way from being built, but if a new Detroit Red Wings arena goes up, the state would pay for the demolition of Joe Louis Arena, Detroit Economic Growth Corporation officials said Friday.

The Downtown Development Authority met Friday to review a plan for the proposed entertainment complex and surrounding area that's expected to go before Detroit City Council next week.

Olympia Entertainment, which owns the Red Wings, the Detroit Tigers, the Fox Theatre and City Theatre, wants to build a 650,000-square-foot arena with 18,000 seats and invest $200 million in developing a 45-block area around the complex.

The arena itself would cost $450 million. Olympia would contribute $11.5 million annually for 30 years toward the construction debt. The DDA would pay $2 million a year. And another $12.8 to $15 million a year would come from property taxes paid within the city's downtown development district.

The DDA wants to expand that district to cover the entire span of the project, which stretches from Grand Circus Park to Charlotte Street between Woodward and Grand River avenues.

City Council is expected consider that action next week in one of many steps in a years-long process to be completed before the arena is built.

Among those steps will be getting a formal commitment from the state to pay for the demolition of the Red Wing's current home, Joe Louis Arena.

"We have a verbal commitment from them at this point," said Brian Holdwick, the Detroit Economic Growth Corporation's head of business development.

A message seeking comment on the matter was left with the governor's office.

"This is private-public partnership that will spur significant economic impact and create thousands of short and long-term jobs and further help revitalize Detroit. State is a supportive partner in this important project," she said.

The DDA would own the new entertainment complex under the plan, meaning the city would benefit only from income taxes -- no property taxes.